The IMF's Lagarde Is Unaware What The IMF's Market-Moving Report Contains

While the exquisitely tanned replacement of former IMF head and Sexcapade-extraordinare DSK, Christine Lagarde, who may or may not have nationalized the entire UV-tanning light inventory of CNBC's Fast Money show, is very much aware of what the latest fashion in leather jackets or what the most fashionable plumage of pret-a-porter Hermes sweaters of the Fall season is, she sadly has absolutely no insight into what the actual contents of the IMF's most watched semi-annual report are, as confirmed by the following exchange between her and an Irish Examiner journalist, that has to be seen to be believed. Critically, not only is it clear that Lagarde has not read the WEO report but the section that IE's Ann Cahill asks about brings up a critical systemic problem in the IMF's over-estimation of growth forecasts in a world of increasing fiscal consolidation - an asymmetric fiscal multiplier.

Christine Lagarde made three crucial mistakes during the Eurogroup press conference.

The first, and most obvious, was letting her guard down and showing off the elite toffee-nosed arrogance that pervades the entire European Council when she initially "who are you and where are you from?" dismissed the Irish Examiner's Ann Cahill, who while failing to hobnob with the Paris Fashion show glitterati, knows enough about finance to shame the head of the world's bailout organization.

The second, which was apparent from Lagarde's parrot-like generic response to Ann's well-thought-out question, was the obvious fact that Lagarde had not read the World Economic Outlook document...

Forward to 36:00 in the following clip to see the initial 'WTF' moment and then the stumble-bumble around the actual question

The third, and perhaps most critical given Lagarde's dismissal of it, is the fact that Ann Cahill's question was extremely astute and points out a huge potential problem of over-confidence in all of the IMF's forecasts.

In Box 1.1 - Are We Underestimating Short-Term Fiscal Multipliers? - the IMF undertakes an important investigation into the fact that their forecasts are consistently over-estimating growth in the real-world.

The main finding, based on data for 28 economies, is that the multipliers used in generating growth forecasts have been systematically too low since the start of the Great Recession, by 0.4 to 1.2, depending on the forecast source and the specifics of the estimation approach. Informal evidence suggests that the multipliers implicitly used to generate these forecasts are about 0.5. So actual multipliers may be higher, in the range of 0.9 to 1.7.

This might sound like a 'good' thing - but critically as Ann Cahill's question pointed to, in a world of fiscal consolidation, the 'under-estimation' of fiscal multipliers means the effect of a fiscal drag is under-estimated and so growth is over-estimated.

In fact, when we look at the errors (below), instead of the nice linear regression that they see in the chart, we notice (the red and green slopes) a much more pronounced asymmetry to the fiscal multiplier over-/under-estimation.

The forecast of fiscal consolidation rises (to the left on the x-axis), so the errors of over-estimating growth (up on the y-axis) increase; and vice versa.

What this means - simply put - is that it appears there is momentum in fiscal multipliers or at the very least, there is a much more marked downside to fiscal consolidation than upside to fiscal expansion.

The Irish Examiner reporter's good question to Lagarde about the fiscal multiplier, is a topic well-covered last week in an Ambrose Evans-Pritchard article, 'Multiplying Europe's fiscal suicide' -

In summary, the figures being used, to claim that cutting budgets is a good thing, are extrapolated from a few situations where countries have their own currency and can devalue, and also were able to lower interest rates from some higher levels ... and neither situation applies now to the Mediterranean countries in the euro-zone.

Evans-Pritchard writes:

« The entire EU austerity plan is based on a false premise. This disastrous error is now clear beyond any reasonable doubt.

The Teuto-Calvinists believe – or profess to believe, since much of their dogma is national self-interest dressed up as theory – that the fiscal multiplier is around 0.5.

That is to say, fiscal retrenchment worth 1pc of GDP will cut output by half as much, or around 0.5pc over two years. There is pain, but at least there is gain.

... [In fact] the multiplier is around 1.0 for the big countries ... The multiplier is nearer 2.0 for part of the Club Med bloc. ...

The IMF data – and indeed the more extreme theory of `expansionary fiscal contractions' – is based on past cases where individual countries were able to claw their way out of trouble by exporting to a healthy global economy, usually by devaluing first and often by slashing interest rates as well. ...

Europe's manic determination to tighten further into recession to meet its bureaucratic targets is nothing less than suicidal. »

Which is why the Portuguese and the Spanish started demonstrating against austerity measures even before they felt the full force of those: everybody is seeing through the example of Greece just how fucked up the idea of austerity for the sake of austerity is if a low productivity country is locked in a single currency zone with the likes of Germany.

"everybody is seeing through the example of Greece just how fucked up the idea of austerity for the sake of austerity is if a low productivity country is locked in a single currency zone with the likes of Germany."

Then common sense indicates they should demand their states withdraw from the EU/EMU and then proceed with aus- ... wait, no ... then they'd actually get the austerity they obviously don't want (gee I wonder whyyy...) and certainly are not getting.

Okay so I'm being facetious, but so are you - "austerity for the sake of austerity" LOL! More like "tell the Troika and core nations whatever they want to hear, the Fabian socialist Ponzi kleptocracy will continue as planned!" Okay, still not there? For you, austerity means your country's cradle-to-grave gold-plated welfare plan is not growing at a fast enough annual clip in terms of expenses/liabilities; for me, austerity means my country has never heard of welfare and could not cut social expenditures/outlays because there are none.

The up-side to a financial implosion is cheap hookers so not sure why you have a problem with a 4 hour woody, unless your paying for 2/3 at a time. My mate says you can get your lolly licked for a fiver.

I wish you had told me that her tan was orange a lot earlier. I just threw out my effing computer thinking it was going on the blink when I saw that orange colour. I wonder after that performance whether her surname is derived from the word Englsih word LAGGARD.

yes total gangsters, but as i have said before, i would rather hang with the real mafia, then these hypocritical, disgusting human beings. i mean they are fleecing Greece to oblivion and saying 'we are doing this to save the world economy' what a pile of bs, the peasants of Greece, Spain and Portugal couldn't give a f*ck when the world goes into an economic meltdown. just live off the land and drink wine, which they have been doing since all their empires collapsed in the last 500/1000yrs. merkel goes there to show a good face, pure craziness. some mad greek will blow himself up somewhere at some point.

You can literally see the point, to the micro second where she shits her pants and understands what horrible thing is coming next. Her adam's apple bobs around under that thin leathery orange exterior.

I am thinking more along the lines of the most recent American Presidents, Mr. Obama and Mr. Bush. She gets the title, someone else holds the power and makes the decisions. Who really was behind the ousting of the unlamented Dominique Strauss-Kahn?

I thought the USA political elite could blow smoke up my ass, but these guys and gal make our elite look like small beans. They have taken dancing around an issue to a real art. I guess it is how long Europe has been around.

The market already moved anyway, the market now resides in Ben Bernanke's shorts..... His tool and his junk are ready for any and all reports, at any and all times. He has a party in his pants, everybody relax and enjoy the morning wood. The futures go green at 4am in sync with the Royal pee hardon.

"The IMF was created by 1st world countries to help 3rd world countries get through tough times."

Wrong. That's what is written but not what they do. Is like the UN. They wrote the Chart... The Right of Self Determination for peoples is enshrined in the founding Chart of the United Nations ... Nice, but just words.

Since when is giving bigger loans to someone who is already in debt considered "help"?

The modus operandi of the IMF has never changed. Politicians in developing countries mismanage the countries resources aided and abetted by local and international banks. When finances hit the arithmetical brick wall, the IMF rides in and provides bigger loans. Politicians and banks are saved and the population is doomed to repay the loans via increased cost of living and perpetual poverty.

The UN operates in similar fashion except that they make use of Western newly minted currency to spread it far and wide so as to keep the fractional reserve dynamic going. The UN plays a role in the expansion of Western credit markets thereby saddling Western society with increasing debts. When finances hit the arithmetical brick wall, the IMF rides in and provides bigger loans. Polticians and banks are saved and the population is doomed to repay the loans via increased cost of living and perpetual poverty.

The difference between developing countries and the West is purely that the West is fleeced last because it is the West that provides the tool for impoverishment - i.e. the fractionally reserved fiat currency...

<QUiZ>: IMF - WORLD BANK - BIS ... what all these three institutions have IN COMMON?

dunno the answer, just read below!

1944: In Bretton Woods, New Hampshire, two further Rothschild world banks are created. The International Monetary Fund (IMF), and the World Bank.

It’s not just America. The elite bankers who own and control the Federal Reserve, are also behind the central banks of almost every country in the world.

And they control the The European Union, the International Monetary Fund, the World Bank, the Bank of International Settlements, Goldman Sachs, JP Morgan, Citibank, etc.

The BIS is referred to the bankers as the, “Central bank for the central banks.” Whereas the IMF and the WorldBank deal with governments, the BIS deals only with other central banks. All its meetings are held in secret and involve the top central bankers from around the world. For example the former head of the Federal Reserve, Alan Greenspan, would go to the BIS headquarters in Basel, Switzerland, ten times a year for these private meetings.

How Edmund de Rothschild Managed to Let 179 Governments Pay Him for Grasping Up to 30% of The Earth

In 1991 its name was changed to The Global Environment Facility (GEF).

The purpose of the Facility is to lend money to the poorest countries, 'money' printed by the IMF out of thin air and guaranteed by our governments.

The Facility seeks wilderness areas rich in minerals as security. The idea is that GEF money then flows back to reimburse our governments for loans. I.e., we give away our tax money. For what? When a country cannot repay loans to the GEF it must give up a piece of its territory to the Rothschild banks (GEF, IMF, World Bank).

The total amount of land involved can be as much as 30% of the Earth's surface.

If land cannot be offered as collateral, the country must starve (Haiti, Argentina and others). Rothschild's stroke of genius was that he had his GEF smuggled into the UN system at the Rio UN Summit in 1992 by his friend, Maurice Strong. Thus, high-ranking ministerial officials from 179 countries are practically co-opted onto the council of the bank, thereby endorsing Rothschild's theft of the world!

This article features interviews with a man who was a participant at the 4th World Wilderness Congress, a man who knows what happened there and who knew Rothschild personally, as well as David Rockefeller, who tried to silence him about what he had learned at the Wilderness Congress.

The GEF is to manage the money which was promised to the developing countries at Copenhagen (100 billion dollars a year from 2020 - 30 billion over the next 3 years) with the help of the World Bank.

However, Rothschild does not leave it there.

He and his henchmen are now joining the race along with certain governments (China, Saudi Arabia) to buy up large areas of farmland in developing countries and have the crops transported back to the home countries. This leaves the locals, already starving, with much less crops available - with food prices rising rapidly - which is exactly Rothschild’s intention.

This villainy forces people to flee from Africa to Europe. Food prices have doubled in the past year or so. Many people in Haiti, even before the earthquake, could barely afford to buy a minimally nourishing mud pie.

Since the 4th World Wilderness Congress in 1987, where Earth Charter co-author and illuminist, Maurice Strong, fatefully introduced his friend, Edmund de Rothschild, the world has never been the same. The Devil - or should I say CO2 - was at large. Rothschild stated that CO2 was the cause of (non-existent) man-made global warming.

CO2, therefore, had to be caught at the poles and transported away in order to lower warm arctic/antarctic temperatures, and perhaps dumped in the Sahara!

This absurdity was accepted without discussion at the UN Rio Summit in 1992!

Here is Rothschild's approach

...to grabbing 30% of the Earth with the consent of our governments/central banks

Andrew Hitchcock in 'The History of the Money Changers,' 2006:

"In 1987, Edmund de Rothschild creates the World Conservation Bank which is designed to transfer debts from Third World countries to this bank, and in return, those countries would give land to this bank.

The idea is for the IMF to create more and more SDR’s backed by nothing, in order for struggling nations to borrow them.

"These nations will then gradually come under the control of the IMF as they struggle to pay the interest, and have to borrow more and more. The IMF will then decide which nations can borrow more and which will starve. They can also use this as leverage to take state owned assets like utilities as payment against the debt until they eventually own the nation states.

"1988: The World Central Bank has three arms, the World Bank, the BIS and the IMF.

2000: How the World bank and the IMF took over Argentina, Tanzania and Bolivia. Terrible reading.

So, he not only cashes in on CO2 at Bluenext and the London Climate Exchange and soon at the Chicago Climate Exchange, if the US Senate approves Rockefeller/Brzezinski puppet Obama's Waxman-Markey Climate Change Bill.

Rothschild is making himself the world's leading CO2 trader now.

Now, Rothschild cashes in from all peoples on the planet, letting them toil as his slaves to pay to Rothschild's GEF bank, in order that Rothschild can fleece the poorest countries of the very same planet - or take their land with all its mineral riches as forfeited collateral!

In Haiti, before the earthquake, people could not even afford to buy humble mud pies because the price of food doubled - as a consequence of the production of bio-fuel because of Edmund de Rothschild’s unscrupulous but very profitable lie about CO2 driving global warming .

How the failure in Copenhagen must vex Rothschild. It could have led to an enforceable definition of his system to make huge profits through increasing CO2 taxes globally which would gradually lead to the 'world community's' ruin, as well as Rothschild becoming the shrouded emperor of the world.

But he has got time. He knows his time is near-after 234 years of hard mole work.

But it must be a big comfort to Rothschild that rich countries committed themselves to provide $30 billion of climate aid over the next three years and $100 billion a year from 2020 to the never-developing countries.

(March 17, 2010) For decades, people have urged me, pushed me, prodded me, practically peeled off my skin, pulled out my eyes, and yanked out my brain to prove it, i.e. show them the data, the results, the books, manuals, pamphlets, journals, monographs, voice and video recordings, all the resources I have used to make the statements I do about the Brzezinski Cartel and the Rothschilds.

On the evening of St. Patrick's Day 2010, I feel now is the time... but with a twist.

The list below shows 165 different ways how The First Sphere of Influence (Rothschilds and Brzezinski Cartel) controls the world. One hundred and sixty-five reasons to believe what I say to be 100% accurate and true.

Each entry is a separate and distinct central bank, located in a separate and distinct part of the world. These central banks cover the globe and know absolutely no boundaries, effectively erasing borders between even sworn enemies.

The Bank of International Settlements or BIS (pronounced BIZZ) is the Rothschild's piggy bank, a veritable deep-pit mine, the equivalent of quadrillions of dollars.

. . .

ABOUT THE AUTHOR: William Dean A. Garner is a New York Times bestselling ghostwriter and editor of many fiction and nonfiction books. A former biophysicist, US Army Airborne Ranger, and Corporate Mercenary, Garner did 211 overseas missions over a nine-year period, escorting clients out of hostile territories so they could have a voice of peace, freedom and liberty. A Jeffersonian Patriot, he writes and speaks about the dangers of The First Sphere of Influence, a global cartel controlled by the family Rothschild.

Shanghai Composite up a solid 2.0% at lunchInvestment bank says insurance companies buyingChatter that CIRC guiding insurance companies to buy sharesChinese officials always said they would support SSEC at 2000

Tiger style...

FMD how long can this global central bank/krugman/Keynesian nut-case insanity last? We await Aloca, unless the Fed are buying aluminum? You never know.

If only we lived in a free(-market) society, the business of predictions would be struggling ... the media would go under, economists/traders/pundits would stop showing up on TV, politicians would be jailed ... I certainly long for a free society.

How many of the predictions you've read here (on this site), whether you liked them or not, have come true, within the predicted time frame, of course. Because as we all know, on a long enough timeline ...

Bastiat - whilst i agree our society/economy is being impoverished and suffocated to death by the Monopolists Matrix, its HQ central and primary ratchet being Govt, i disagree we are not "free"

we are still very much free to extricate ourselves from the Matrix at any time, from the banking system, from Govt taxation (theft) and from a whole host of other parasitical institutions

we also have a dozens of free markets, from farmers markets to small biz to the black market ...the sooner we endorse (with our custom) these markets and impoverish the BIG Bad markets. from retail to banks etc, the sooner change happens

you just have to make some simple (big) decisions and work toward your own increased freedom and prosperity in baby steps ...don't pretend you are not free to do so

-her lust for the latest fashion in leather things (her bag is one of the center piece)

just wonder much her orientation... straight or not... or AC/DC :-)> LoL

with a head like this, the world will simply sink even deeper n deeper... my great pity for the Southern European in particular.... (as for the Developing World, it has been very long and endless loot until today).

all the crooks of this quality (and higher) are indeed entitled for the people's firing squad soon one day

You'll have to give her a break she only makes about $500k/yr tax free. What's a mistress of the universe to do? So much money so little time to spend it let alone do her job and read her office report. Do the Greeks read ZH?

"The managing director of the International Monetary Fund is paid a salary of $467,940 (£298,675), automatically increased every year according to inflation. On top of that she receives an allowance of $83,760 – payable without "justification" – and additional expenses for entertainment, making her total package worth more than the amount received by US President Barack Obama according to reports last night.

Unlike Mr Obama, however, she does not have to pay any tax on this substantial income because of her diplomatic status."

A pure 'the IMF satanist wears Prada' moment... The Irish lady had Midwestern garb on, clearly not a 'beautiful people' and so has to 'take it offline'. Which means go talk to a dead phone about this you peon shit